Taking profits on Minnesota LLC

[Jeremy L Riddle]

Greetings! My wife and I have 2 Single Family Homes in an LLC with another couple. We've had it for 9 going on 10 years now and have taken an owner draw one time in the history of the company (maybe 2 times) for less than 3K total per couple. The rest of the $22+K profits are sitting in the LLC checking account. The renters are long timers - very good pay history, have been in the houses for 4 yrs and 7 yrs. Our business partners want to make some improvements to the house with the 7 yr tenants in it - it does need carpet, some minor mechanical improvements, etc pretty badly but they want to use money from the checking account to pay for it - the house is within 3 years of being paid off and has more than enough equity to cover it. My understanding is that the money in the account is our money that we've paid taxes on through the K1 statements that come each year. They don't seem to understand this and blank stare when I tell them I would like my money. How do I make them see that this money is half theirs, half ours, and not the LLC's money and that we should use equity to pay for the improvements? Or am I wrong? What would you guys do? I'm not willing to spend more of my money on a business/investment that is only building equity and no cash flow. I need advice. It seems to us that if equity is our goal then selling now at the top of the market would be wise. If profits, then we should be taking them.... Thoughts?

[Tim Swierczek]

@Jeremy L Riddle  you are correct that is your money to disperse if you want, however, I think your missing the point that when you do the repairs those repairs will be either an expense and tax deductable or they will be capital improvements and increase your basis.  That part does not change based on where the funds come from.  I personally do like using the equity but if your goal is to pay it off then you may just use cash.  Either way, the method of payment will not change the taxability of the repairs.  @John Woodrich would be a great resource here.